Galaxy Digital Joins $50M Raise for Crypto Staking Firm Figment

“Proof of Stake and the ability to earn yield will be an important catalyst in driving further institutional interest in the digital asset industry,” Mike Novogratz, CEO and founder of Galaxy Digital said.

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Andrew Cronk, co-founder and chief product officer of Figment

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key takeaways

  • “The people staking today are early initial investors but the characters are changing and one of our goals is to bring more people into staking — retail and larger companies — and increase participation and amount of people staking,” Figment Co-Founder and Chief Product Officer Andrew Cronk said
  • Prior to the funding, the company said it experienced 20x quarter-over-quarter growth and hit over $7 billion in digital assets staked to its infrastructure across over 40 networks it supports

Crypto staking firm Figment has raised $50 million in a new Series B funding round led by Senator Investment Group and Liberty City Ventures. 

Notably, other participants include Mike Novogratz’s Galaxy Digital, Dan Tapiero’s 10T Holdings, Anchorage Digital, Declaration Partners, Bonfire Ventures, JPK Capital, 40 North, Finality Capital Partners, GSR, GFT VC and Hard Yaka. 

Although Bloomberg reported Figment’s valuation at about $500 million, the company declined to comment on sharing a valuation, Andrew Cronk, co-founder and chief product officer at Figment, told Blockworks in an interview. 

“When we started the company, the big bet was, you can launch a PoS [proof-of-stake] network. Our bet was that in the future there would be more blockchains and PoS and that has been proven true, a lot of blockchains have been launched in the last few years,” Cronk said. 

For Figment, their next chapter is focusing on getting more people into staking, whether that be individuals or institutions, and bringing more developers into the space, he said. The funding will be used to grow the company’s headcount and diversify its services for the Web3 stack.

“The people staking today are early initial investors but the characters are changing and one of our goals is to bring more people into staking — retail and larger companies — and increase participation and amount of people staking,” Cronk said.  

Moving toward Web3

The investment round further solidifies Figment’s role in building Web3 and accelerates its ability to assist the PoS industry with the development of back-end systems and infrastructure that provide yield on digital tokens and other assets, the company said. 

“We think we can move toward Web3 by launching and experimenting,” Cronk said. 

The capital raise also shows institutional investors’ support and demand for platforms that help create and support PoS assets that can produce a yield as well as appreciate in value like bitcoin, ether and other digital assets, Figment said. 

“Proof-of-stake and the ability to earn yield will be an important catalyst in driving further institutional interest in the digital asset industry,” Mike Novogratz, CEO and founder of Galaxy Digital said. 

“This funding round marks the start of a new chapter at Figment that aligns with the evolution of the industry. PoS has gone from proof-of-concept to mainstream, and is being adopted by investors and developers at a massive scale,” Figment CEO Lorien Gabel said in a statement. “Our 100+ institutional clients and billions in AUM is just the beginning for us. Our belief is that the majority of value and data will be exchanged, settled and stored on PoS blockchains,” Gabel added. 

Prior to the funding, the company said it experienced 20x quarter-over-quarter growth and hit over $7 billion in digital assets staked to its infrastructure across over 40 networks it supports. The company has raised about $55 million to date. 

When Figment runs validators, they earn tokens and keep almost all of it, he added. “So that means we have a direct incentive to increase the direct participation and value on the network. If we’re sitting and growing longer and longer on this network, we’re trying to grow this space. It’s all about incentives, we’re living it, we’re walking it, we’re trying to do everything we can,” Cronk said. 

Proof-of-stake explosion

The PoS industry has faced explosive growth this past year, through Ethereum 2.0 and other PoS layer 1 protocol launches like Polkadot, Solana and Terra, the company said. “The desire to earn a real positive yield from staking was one of the main factors for the expected growth of the industry,” it said. 

A lot of staking opportunities have popped up within the crypto community. Analysts predict the staking industry will boom in the next several years.

Last week, the crypto wallet Ledger announced that it will now allow users to stake ether through Lido directly on Ledger Live’s interface, Blockworks reported. Separately, Kraken said it paid out more than $100 million in staking rewards to customers in the first half of 2021, Blockworks also reported. 

Lastly, the Ethereum Foundation launched its staking campaign for Ethereum 2 (ETH 2) last fall. For the next generation of Ethereum, staking is important as the network is going through a fundamental infrastructure change from proof-of-work (PoW) to PoS. PoW is determined by how much computing power users have at their disposal.

On the other hand, with PoS, authority is measured on how many tokens you are holding. Thus, in order to bootstrap this network, a sizable amount of tokens are needed to be held by a large group of people for some time for it to pay off. 

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